Tag: SBA

The U.S. Small Business Administration (SBA) last week published a final rule for its federal Microloan Program that will for the first time allow microloans to small businesses owned by someone currently on probation or parole. In its announcement, the SBA noted that this will “aid[] individuals with the highest barriers to traditional employment to reenter the workforce.” The change was evidently prompted by a review of agency regulations requested by the Cabinet-level Federal Reentry Council established in 2010 by former Attorney General Eric Holder.

While the change is welcome, it leaves in place substantial restrictions for people under sentence in other SBA loan programs, discussed at length in a post on this site last December.

It is also striking for being the only relaxation of federal collateral consequences since the Reentry Council was established five years ago. As reported on this site, federal agencies are said to be “mostly satisfied” with their the way their regulations address the situation of people with a criminal record.

In December 2014, Amy Solomon, Senior Advisor to the Assistant Attorney General for the Office of Justice Programs in the Justice Department, testified before the U.S. Senate Addiction Forum about the review of collateral consequences federal agencies had been conducting under the auspices of the Federal Reentry Council. She reported that most of the agencies participating in the review had concluded their collateral consequences were “appropriately tailored for their purposes.” However, she also reported that Small Business Administration (SBA) had proposed amendments to its regulations to allow people on probation or parole to qualify for loans from its microloan program. (The change, proposed almost a year ago, has still not become final.)

We decided to take a look at the SBA’s proposed rule change, and at the SBA regulatory scheme more generally, to see how having a criminal record affects small business eligibility for government-backed loans. Read more